Social Gaming On Smartphones Is Disruptive

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Mobile gaming on smartphone and tablets is disrupting traditional single-purpose mobile gaming devices. Downloads of Rovio’s Angry Birds game skyrocketed to over 600 million by the end of last year from around 1.5 million at the beginning of 2010. On the other hand, sales of the Nintendo DS (and the new 3DS) have basically flatlined over the past two years.

As we argued in a recent report, social gaming is going to disrupt the traditional gaming industry. We believe the main reason is that social games are a service, not a product. Yes, they are less polished than their traditional counterparts, but they are free and can be constantly updated and improved because of the distribution model.

It also highlights the disruptive power of smartphones and tablets. Why would anyone buy a single-purpose gaming device like the DS when you can own an iPhone that plays games, makes calls and can surf the web?